IRS to begin private collection of federal tax debts

  • March 9, 2017
  • Steve Wisinski, CPA, MAFF

Beginning this spring, the IRS will start to collect federal tax debt through one of four private collection agencies. The new program enables these designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables. A sample taxpayer notice, CP40, is available online at

At ShindelRock, we deal with collection agencies for other governmental organizations and it is not always a smooth process. It has been our experience that the communication between the collection agencies and the government is not timely and often times incorrect or incomplete. This causes issues when trying solve issues, as there are now two entities in charge. We have had numerous occasions where we have a situation cleared up with one entity only to have the other one continue the collection process. This doesn’t affect just people who don’t pay their taxes. This can effect anyone to the IRS says owes them money.  Finally, a lack of communication between the two forces us to spend additional time calling and coordinating between both the government and the collection agency resulting in extra time and cost to our clients.

This makes it all the more important that our clients contact us as soon as they receive a notice. Please be prepared that if we do have to reach out on your behalf to the IRS or these collection agencies, we will always work as efficiently as possible on our side. If you have questions, please feel free to reach out to your ShindelRock tax professional at any time.